South Bend Regional Airport sued over hangar lease

SOUTH BEND — A company that was supposed to start at South Bend Regional Airport may have trouble finding a home, thanks to a lawsuit filed this month by a possible competitor.

Atlantic Aviation, a national company that provides fuel and other fixed-base operations at the airport, has filed a lawsuit against the St. Joseph County Airport Authority, claiming the airport ignored the company’s long-standing lease for a hangar on the airport’s property.

Last month, airport executive director Mike Daigle announced that a new company, Pro-Air Flight, was coming to the airport with the plan to create up to 30 jobs by starting a fixed-base operation, providing services like fuel to the airport’s customers.

“(Pro-Air) will provide — along with our current fixed-base operator, Atlantic Aviation — competition and services that will be desired by corporate and general aviation,” Daigle said in June.

But to locate at the airport, Pro-Air Flight planned on signing a lease for the airport’s east hangar — which Atlantic Aviation previously had rented, along with an agreement to match offers from another company seeking to use the space.

According to the lawsuit, Atlantic Aviation has leased the airport’s east hangar on a monthly basis since at least 2006, and had the “right of first refusal” if another company wanted to lease the space. But Atlantic claims it was never notified that another company was interested in using the hangar; instead it received a one-month notice in February that the lease was going to be terminated — even though the airport apparently knew about the existing “right of first refusal” agreement.

In an e-mail written in January, then-airport director John Schalliol mentioned the agreement in a letter that Atlantic obtained by using the Freedom of Information Act.

“As you may or may not be aware, Atlantic has a month-to-month lease on that building and they also have a right of first refusal in the event that we get a better offer,” Schalliol’s email reads.

Schalliol’s e-mail also warned that “I don’t want to move forward with you, and then have Atlantic offer to match your offer, just to keep a competitor out.”

Although Atlantic tried to make a new lease agreement with the airport in January, no resolution was met.

In June, the airport authority again asked the company to vacate the hangar — leading to the filing of the lawsuit in June.

Despite the claims, and the e-mails from the airport, Daigle said today there was little he could say about the situation since litigation had been filed — except that no resolution has been reached in the situation.